Service Contract Insurance
In many states, a Service Contract provider needs to show how they will guarantee the financial performance of a Service Contract. Depending on the state and its specific requirements, this can potentially be achieved with the use of a Contractual Liability Insurance Policy (CLIP) or a Service Contract Reimbursement Insurance Policy.These policies back the provider's obligations using a few different structures, depending on the specific states and requirements. In some cases, the policy covers 100% of all the claims, and in other cases, the policy acts as a Failure To Perform Policy and only pays claims if the provider fails to pay the claims.
Typically, the carrier will require a claims reserve account with adequate funds for expected claims over the contract term. This can be addressed in several ways, and using a Trust Account is a common way to address the reserve.
Obtaining Service Contract Insurance is a straightforward process, and rates and eligibility can be determined based on a few pieces of information.
Contact Meramec Secure. Inc. for more information.